Calculating Mileage Reimbursement Step by Step

Mileage reimbursement looks like the simplest calculation in business travel — multiply miles by a rate — right up until you hit a multi-leg trip, a rate change mid-year, or a question about which miles actually count. Here's the whole process laid out properly, step by step.

Step 1: Count only business miles

Business miles include travel between job sites, to client meetings, and to temporary work locations. They do NOT include commuting miles — the drive from your home to your regular, fixed office is personal travel under IRS rules and is never reimbursable as business mileage, no matter how far it is or how work-related the destination feels.

Step 2: Apply the correct rate

• IRS standard rate 2026: 72.5 cents per mile for business (Jan–Jun), rising to 76 cents per mile (Jul–Dec) after a mid-year adjustment — see our full breakdown of the 2026 rate change.
• Example: 80 miles × $0.725 = $58.00 before July 1; 80 miles × $0.76 = $60.80 from July 1.
• If your employer uses a different agreed rate — some do, provided it doesn't exceed the IRS figure for tax-free treatment — multiply by that rate instead.

Step 3: Round and submit with a log

Round the total to two decimal places and attach a mileage log showing: the date, starting point, ending point, business purpose, and total miles for each individual trip. A log is required for the reimbursement to be tax-free under IRS accountable plan rules — without one, the whole payment risks being treated as taxable wages rather than a genuine expense reimbursement.

Step 4: Total multi-leg trips correctly

If you drive from the office to Client A, then to Client B, then back to the office, count each leg separately and add them together — you don't calculate a single straight-line distance for the whole day. Our mileage reimbursement calculator handles multi-leg totals automatically, saving you the arithmetic and reducing the chance of an under- or over-counted leg.

“Taxpayers can use the standard mileage rate to calculate the deductible cost of operating an automobile for business use in lieu of tracking actual costs.”

— Internal Revenue Service, irs.gov

Rate changes mid-trip or mid-log

If a trip or a month's worth of driving straddles a rate change — like the July 1, 2026 mid-year rise — split the log at that exact date and apply the correct rate to each portion. Miles driven on June 30 use the old rate; miles driven on July 1 use the new one, even within the same week.

What if I'm not reimbursed at all?

If your employer does not reimburse business mileage, self-employed workers can deduct it directly on Schedule C — see our guide to mileage tax deductions for the self-employed. Employees who are not reimbursed generally cannot deduct unreimbursed mileage on federal returns, since the miscellaneous itemised deduction for unreimbursed employee expenses is suspended for most filers under current law.